UPS Drops As Tough Macro Weighs on Outlook

Shares of United Parcel Service (UPS:US) are trading lower on Tuesday after the company reported first-quarter results and offered a soft outlook for the rest of the year.

The parcel carrier reported EPS of $2.20, inline with analyst estimates. However, revenue of $22.93 billion came in below the consensus of $23 billion as stronger-than-expected year-over-year deceleration was fueled by a 6.8% decline in International package sales. 

UPS said its average daily package volume was 22 million while the total package volume came in at 1.41 billion, both slightly weaker relative to analyst expectations. 

Carol Tomé, UPS chief executive officer. Commented:

"In the first quarter, deceleration in U.S. retail sales resulted in lower volume than we anticipated, and we faced ongoing demand weakness in Asia. In response, we focused on controlling what we could control and delivered first-quarter consolidated operating profit and operating margin in line with our base case targets. Given current macro conditions, we expect volume to remain under pressure.”

As a result, UPS said it now sees revenue at the low end of its $97-99.4 billion range.

The earnings report comes as the UPS stock is outperforming the S&P 500 by nearly 500 basis points. The earnings-fueled pullback in shares also comes after several Congress members sold the stock in recent months, including Rep. Michael McCaul’s transactions completed in the fall of 2022.

Most recently, Rep. Josh Gottheimerand Scott Franklin were selling the UPS stock while their colleagues Ro Khannaand Daniel Goldmanwere accumulating shares below the $200 per share mark.